Chancellor of the Exchequer Rachel Reeves has rubber-stamped a £1.5bn boost to the UK Government’s DRIVE35 programme that supports the UK automotive sector in her 2025 Budget.
The extra funding brings the total capital support pledged by the government to the automotive sector in the next 10 years up to £4bn.
DRIVE35 is a programme of capital and R&D funding for the automotive industry, which allows UK-registered businesses to apply for grant funding for large-scale capital investments in the manufacture of zero-emission vehicles and their supply chain components.
Speaking at the Society of Motor Manufacturers and Traders (SMMT) annual dinner on the eve of the Budget announcement, Business and Trade Secretary Peter Kyle said: “What’s good for the British motor industry is good for Britain. This is the biggest government investment in our car industry since the post-war era – and it will drive growth, innovation, and jobs across the country.”
Kyle said the funding would go towards the acceleration of electrification of vehicle plants and investment in batteries, electric motors and power electronics.
He also referenced support the government has already directed towards the motor industry in the past year, such as the launch of the British Industrial Competitiveness Scheme to cut electricity bills for over 7,000 manufacturers, a £1.3 billion boost to the Electric Car Grant, extended to 2030, a £200 million top-up for charge point rollout and a consultation on new Permitted Development Rights to make home charging easier.
